Liberalisation Of ECB Guidelines

The Reserve Bank of India ("RBI") has vide its recent notification dated 4^th November 2006 liberalized the External Commercial Borrowing (ECB) guidelines enabling corporates to now raise ECB for an additional USD 250 million.

Previously, corporates were permitted to avail ECBs up to a maximum cap of USD 500 million during a financial year under the automatic route with minimum average maturity period of 5 years.

As per the amended guidelines, Corporates can avail ECB for a further amount of USD 250 million with average maturity of more than 10 years under the approval route. This borrowing facility is in addition to the existing ceiling of USD 500 million under the automatic route with average five year maturity, during a financial year.